Since the summer of 2019, Burisma Group, a Ukrainian energy company, has been surviving in a perfect storm. The enterprise has found itself at the center of political struggle in Washington, having be
Burisma Group is engaged in honest and
transparent energy business in Ukraine, annually producing over 1 billion cubic
meters of natural gas. This
is more than 5% of the entire volume of gas consumed in the country and more
than 10% of imports.
The group has never concealed its ownership structure, which can be easily
checked in open registers.
All
that is the group’s “fault” is that five years ago, Burisma’s Board of
Directors adopted a new development strategy.
It provides for engaging competent experts into
the Board according to the best international practices of oil-and-gas company
operations and standards of corporate governance.
The following success
of Burisma Group operations proved that the Board’s decision was strategically
well-founded. Today, the company is not only producing billions of cubic meters
of gas but also investing billions of hryvnias in examining new areas, studying
and exploring hydrocarbon fields and developing means of production. This
allows for an increase in gas extraction in Ukraine thus helping the country to
gain better energy independence from gas imports.
In the course of the past two
years, Burisma Group invested about 1 billion hryvnias into geological
prospecting and exploration on the territory of Ukraine. In particular, last year the group carried out 3D
seismic works in an area of more than 500 square kilometers, having concluded
contracts with foreign and domestic companies to cross-examine and interpret
the data obtained.
In 2019, the group also drilled nine new
high-tech wells and did capital repairs at 22. Over all, during the last three
years more than 40 wells have been drilled and more than 50 repaired. It
is planned to drill 15 more new wells in 2020. Today, stimulation and
capital repair works are ongoing at four wells, and three wells are being
prepared for drilling.
The company pays a lot of attention to investments into
cutting-edge technologies.
Burisma Group drills its wells using new, state-of-the-art equipment, which was
expanded in 2019 with Italian drilling machines Drillmec.
All in all, Burisma owns 20 drilling machines with capacities ranging from
112 to 680 tons, including the SK 3000 worth UAH 1 billion – the largest land
machine in Eastern and Central Europe.
Moreover, Burisma Group operates the largest hydraulic fracturing fleet in
Ukraine, consisting of 15 pumps with a total capacity of 35,000 horsepower and
has its own NOV Hydra Rig coil-tubing fleet.
In addition to drilling,
Burisma Group is actively investing in on the ground infrastructure. For
example, last year the group started construction of a turbo-expander unit at
the gas distribution station in the Vodianivske field. The facility’s
operations will increase profitability of gas production and reduce the cost of
work.
In 2020, Burisma plans to build new gas pipelines and facilities for propane
cooling of natural gas, reconstruct its Complex gas treatment unit, continue
the construction project of a condensate stabilization unit and a plant for
deep extraction of propane-butane mixture (technical propane butane mixture or
LPG) from natural gas.
At the same time, Burisma Group advocates for environmentally-friendly business
and prefers business solutions that help preserve the environment.
Burisma is one of the largest taxpayers in Ukraine.
In 2019, in spite of the “perfect storm” and unfavorable market
conditions, the company paid around 3 billion hryvnias into the budget. This
amount can be compared to the costs that Ukraine plans to use in 2020 for
procurement of drugs and medications to treat a number of serious diseases or
for provisions of special equipment to schools or social protection of teachers
or for recycling of ammunition which can be found in large numbers in the
country because of the ongoing war.
Every year, Burisma Group spends hundreds of millions of hryvnias
in cooperation with local communities for social protection of children. This
is a multifaceted and long-term agreement aimed at development in the regions
where the group carries out gas extraction.
Thus, for example, by the beginning of the academic year, the group is
giving useful and essential presents to schoolchildren in the regions. Last
year, the company provided Kharkiv region’s educational institutions with
state-of-the-art equipment and sports clothes. The group also awarded authors
of the best Ukrainian songs with special prizes in course of a project called
“All-Ukrainian Children’s Charity Festival “Black Sea Games – 2019” held in
Skadovsk.
All in all, during the last three years, Burisma Group realized social
projects to the amount exceeding 160 million hryvnias. The group’s
funds were used to build and repair hospitals, schools, kindergartens, sports
clubs, motorways and other socially-significant objects in many towns and
villages of the Kharkiv region.
A perfect storm is dangerous.
It leaves no one alive in the eponymous film by American director Wolfgang
Petersen. However in real life, I am sure Burisma Group will not only weather
the blows of political waves but continue its strategic course of development.
Of course, it would be great to
get some support from the state and international organizations. Because the
group’s energy business carries a strategic importance not only for Ukraine but
for all of Europe. However, until the next elections in the USA in 2020, I am
afraid that the attacks on the company from ill-wishers will not cease. That is
why, today, Burisma’s principal task is, after all, to try to pass unharmed
between the Scylla and Charybdis of international politics.
Taras Burdeinyi, Chief Executive Officer at Burisma Group
Джерело: Kyiv Post
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